Feb. 25 (Bloomberg) -- In a city notorious for corrupt
politicians, the constituents of Chicago’s South Side and
southern suburbs have endured more than their share. The latest
evidence comes tomorrow when they head to the polls to pick
party nominees in a special election for the seat of disgraced
former Congressman Jesse Jackson Jr.

Those voters haven’t had representation since Jackson went
on medical leave in June. Constituents of his wife and co-defendant, former Alderman Sandi Jackson, have been doubly
short-changed: Election rules gave Mayor Rahm Emanuel, not
voters, the power to select her replacement.

With the fall of the Jacksons, who pleaded guilty last week
to fraud, 10 percent of Chicago aldermen taking office since
1981 have been indicted for corruption and replaced by mayoral
appointment. That has undercut democracy in the third-most-populous U.S. city, said Dick Simpson, a former alderman
teaching political science at University of Illinois at Chicago.

“Appointments create a rubber-stamped city council without
a legitimate legislative process to conduct checks and
balances,” said Simpson, who has done studies measuring
political corruption’s financial costs. “There’s an ongoing
struggle to create a more democratic process in Chicago.”

The federal judicial district that includes the city is the
most crooked in the U.S., judging by the 1,531 public-corruption
convictions since 1976, according to a February 2012 report by
Simpson. Per capita by state, only Louisiana has more such
convictions.

Pension Costs

Chicago is struggling with pension costs projected to reach
$1.2 billion a year by 2016, which would eat up 22 percent of
its budget. Perceptions of corruption and mistrust could further
deter investors, said Richard Ciccarone, managing director at
McDonnell Investment Management LLC.

“Chicago risks getting that emblem of corruption, which
could come with a price in the marketplace,” said Ciccarone, of
the Oak Brook, Illinois-based firm. “The more you have an
unsecured debt situation, you risk placing the trust factor in
jeopardy when you have repeated influences of corruption.”

The vote to replace Congressman Jackson, 47, scion of the
iconic civil-rights family led by the Reverend Jesse Jackson,
recalls the 1995 special election in which the younger Jackson
filled a vacancy left by Mel Reynolds, who was convicted of bank
fraud and sexual assault. Out of prison since Bill Clinton
pardoned him in 2001, Reynolds is now one of 16 Democratic
candidates on the ballot in tomorrow’s election.

Corrupt Aldermen

Chicago’s city council has an even bigger gallery of rogues
than its congressional delegation. Since Emanuel’s predecessor,
Richard M. Daley, was first elected in 1989, about 40 percent of
Chicago’s aldermen have been appointed, not elected, according
to city data. Daley named 36 of the 91 aldermen who took
positions under his tenure from 1989 to 2011, filling vacancies
after resignations, health concerns or corruption charges.

Almost 20 percent of aldermen have been found guilty of
crimes since one of their colleagues, Fred D. Hubbard, was
convicted in 1973 of embezzlement, according to Simpson and city
records. Sandi Jackson’s replacement, Natashia Holmes, is the
first aldermanic appointment by Emanuel.

“It’s going to strengthen his control over the city
council if he continues to make appointments like this,”
Simpson said.

These episodes evoke the unofficial motto of local
political pragmatists espoused by Alderman Mathias “Paddy”
Bauler in the middle of the 20th century: “Chicago ain’t ready
for reform yet.”

Inspector General

That remains true today, by some measures. Earlier this
month, the city council rejected a proposal by Emanuel that
would have allowed the city’s inspector general to investigate
anonymous complaints against aldermen.

Appointments that bypass elections aren’t the only
hindrance to the democratic process in Chicago, said Andy Shaw,
president of the Better Government Association, a Chicago-based
group that tracks corruption. The almost nine-monthlong vacancy
left by Jackson Jr. since he took medical leave in June has cut
the Second District out of legislation, he said.

“Nobody has been representing them in the corridors of
power in Washington, where dollars are parceled out,” Shaw
said. “There’s no mechanism for getting representation when a
congressman goes down like Jesse Jackson Jr.”

The election in the district will cost the city $1.5
million, even after Governor Pat Quinn signed a bill in December
that made the general election coincide with local municipal
voting on April 9, according to the Chicago Board of Elections.

Sexual Advances

In the special election Jackson Jr. won in 1995 to replace
Reynolds, only 18 percent of voters participated, according to
the elections board. The congressman before Reynolds, Gus
Savage, was found by a House Ethics Committee to have made
improper sexual advances on a female Peace Corps volunteer.

Still, Jackson’s case stands out amid Chicago’s rich
history of malfeasance. In his guilty plea on Feb. 20, he
acknowledged misusing $750,000 of campaign contributions to buy
3,100 personal items, including a $43,000 Rolex watch, a hat
that belonged to the late pop singer Michael Jackson and $15,000
in dry cleaning.

Tomorrow’s winner in the largely Democratic district will
be the presumed victor over the Republican opponent in the April
9 general election. Eighty-one percent of the district’s voters
backed President Barack Obama in 2012. The new contest, which
marks an opportunity for a clean slate for the district, hasn’t
been short of controversy.

Bloomberg PAC

It has drawn attention and money from outside Chicago, with
New York City Mayor Michael Bloomberg’s political action
committee targeting Debbie Halvorson, a leading contender who
has a top ranking by the National Rifle Association. Halvorson,
a former congresswoman, is opposed to an assault-weapons ban.

Bloomberg’s super-PAC, Independence USA, has spent more
than $2.2 million on the race, according to the committee’s
filings. Bloomberg is the founder and majority owner of
Bloomberg LP, the parent of Bloomberg News. Halvorson had raised
$98,000 as of Feb. 6, according to federal records.

Another top contender, Robin Kelly, came under scrutiny
last week after the Chicago Tribune reported alleged ethics
violations by her while she worked for the state treasurer. The
office’s chief investigator said she improperly reported time
off from her job while chief of staff in 2010, according to the
Tribune. The Kelly and Halvorson campaigns didn’t return e-mails
and phone calls seeking comment.

The allegations of Kelly’s phony timecards, though, are
small-time next to the history of one of her rivals.

“It’s a very interesting campaign,” Reynolds said of his
participation in the race. “I’m running for re-election because
I think 18 years is long enough to pay your debt back to
society.”